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20 July 2013

Fewer HDB dwellers buy private properties
Number of HDB upgraders should fall as cooling measures bite, say analysts

Source: Straits Times 
By Daryl Chin Property Correspondent

RECENT property measures have put a squeeze on the number of Housing Board dwellers buying private properties.

According to the latest early figures, buyers with HDB addresses picked up 3,700 new private homes in the first six months of the year. This seems to mark a slowdown from last year, which saw 9,985 such transactions across 12 months.

A similar trend has been seen in the private resale market. HDB upgraders bought just 1,550 homes in the first half of this year, compared to 5,261 for the whole of last year.

R'ST Research director Ong Kah Seng said that the market is feeling the effects of the cooling measures introduced in January to prevent home buyers from biting off more than they can afford.

Not only must buyers borrow less on their second housing loan, they also need to stump up 25 per cent of the property's value, up from 10 per cent. Stamp duty for second property purchases also rose to 7 per cent, from none in the case of citizens.

"Besides, many HDB dwellers may have also bought their private properties last year due to a strong supply in attractive locations such as Punggol," said Mr Ong. There were 21,000 private property units launched last year, compared to 10,000 so far in the first half of this year.

The latest figures on HDB upgraders were culled from caveats lodged voluntarily with the Urban Redevelopment Authority. They do not take into account whether buyers own or rent their HDB flats, or if they were buying their first or second private property.

Analysts, including Mr Ong, predict that the number of HDB upgraders will continue to shrink over the next two years.

This is partly because of new rules issued by the Monetary Authority of Singapore last month, which cap a person's total monthly debt repayments at 60 per cent of his gross monthly income. That means that even car loans will be factored in when calculating how much a person can borrow to finance a property purchase.

DTZ's head of Singapore research Lee Lay Keng believes the introduction of the total debt servicing ratio could lead to HDB upgraders scaling back their private property plans. For instance, a buyer earning $8,000 a month who already pays $1,500 towards a car loan instalment will be restricted to buying a second property worth $1.1 million, down from $1.6 million previously.

"The biggest hurdle for this group lies in the cash outlay that includes stamp duties, downpayment and other costs. This can amount to three times the annual income," she added.

Finance executive Leong Yi Xing is waiting for the dust to settle in the wake of the new measures before deciding on upgrading from his five-room Bedok flat.

"HDB prices are still holding up very well compared to private property prices, which may have more room to drop. I'll wait for the price between the two to narrow," said the 31-year-old.

Upgraders shouldn't hold on to HDB flats

Source: Straits Times | Forum Letters 

WEDNESDAY'S article ("Millionaire's ex-wife gets $500k in divorce settlement") reported that a wealthy businessman possessed an HDB flat on top of other private properties.

Those who do not need or choose not to reside in their HDB flats should not be allowed to hold on to them.

While we continue to harp on foreigners and permanent residents depriving Singaporeans of HDB flats, I suspect the reality may be somewhat different.

Upgraders who have moved on from public housing should make the units available for those who are still struggling to own their first HDB flat.

In this way, we could potentially free up thousands of flats that are now being used to generate rent, and provide affordable roofs over the heads of Singaporeans.

Tan Suan Jin

More ECs up for grabs
Seven projects to go on market in second half of the year

Source: Straits Times | Money
By Melissa Tan

EXECUTIVE condominium (EC) developers are again pulling out all the stops in the battle for buyers as competition intensifies in the second half of this year.

Developers of projects under this very popular public-private housing hybrid are no longer allowed to build gargantuan penthouse suites after unit-size restrictions were imposed in January.

The penthouses had been selling for sky-high prices.

But developers now aim to stand out from the crowd by offering ECs with features such as maisonette units, waterfront views, balcony entrances and even a "skypark" 50m above ground.

Of the seven EC projects slated for launch this year, five will go on sale some time over the next four months.

This means that of the 3,337 EC units in this year's supply, an expected 2,226 units will hit the market from now till October.

But EC supply next year is likely to plummet due to a 15-month rule on sales that was also imposed in January.

Under the rule, EC developers have to launch their projects for sale 15 months from the date of award of the sites or after the physical completion of foundation works, whichever is earlier.

Market watchers reckon that there will be no new EC launches for at least the first three quarters of next year and the number of new EC launches next year could be as little as two projects.

ECs are designed to cater to a "sandwiched class" of people who earn too much to qualify for a Housing Board flat but find private property prices too high.

Some first-time developers with solid track records in the luxury segment have also thrown their hats into the ring, lured by the lower total development costs for EC projects compared with private condominium projects.

The price developers pay for EC sites is lower than that for private residential plots because restrictions apply to EC resales during the first decade of occupation.

The new faces in the segment include boutique developers JBE Holdings and Sing Holdings, which are both better known for their high-end projects.

"We're very confident of the EC market... We know that EC buyers are getting more sophisticated," JBE Holdings director Patrick Lam told The Straits Times in an interview on Thursday at The Luxe at Handy Road, which JBE developed.

JBE's upcoming EC project is the 506-unit SkyPark Residences at Sembawang Drive, under a joint venture with construction firm Keong Hong. E-applications are likely to begin in September and bookings in October.

Mr Lam said the EC segment was a "good diversification" away from the luxury market and added that JBE's next project is also likely to be an EC.

JBE won the site for $211.9 million or $323.76 per sq ft (psf) per plot ratio (ppr) last December. The project's construction cost is likely to be just under $150 million, Mr Lam said.

Of that, $3 million to $5 million will be spent on a 1,250 sq m "skypark" straddling three towers about 50m above ground.

No official pricing has been released but market watchers say the price could be between $720 psf and $800 psf.

Both SkyPark Residences and the upcoming 373-unit WaterWoods in Punggol will also include five-bedroom maisonette units.

WaterWoods, next to the Flo Residence condo, is jointly developed by UE E&C and Sing Holdings. Sing Holdings won the site last December for $162.1 million or $351 psf ppr, nearly 9 per cent higher than the second-highest bid of $148.9 million lodged by JBE.

Sing Holdings chief executive Lee Sze Hao said the firm was using the same team working on its high-end projects for WaterWoods.

"This segment is, after all, least susceptible to market speculation, and all EC home owners will also eventually own just one property, which means they present relatively less credit risk... the EC market is one of the most stable housing segments," Mr Lee said.

Lush Acres, City Developments' 380-unit EC at Fernvale Close, was over-subscribed by about 1.6 times when it opened for e-applications last Saturday.

The next EC project to launch in upcoming months is Sea Horizon in Pasir Ris. E-applications are expected to start early next month.

Sea Horizon is Chinese developer Hao Yuan Investment's second EC project. Hao Yuan launched its first EC, Forestville in Woodlands, in June.

Its developer is touting "panoramic sea views" and units that come with french balconies and full-height windows.

"Sea Horizon is one of the rare few executive condominiums that boast a coastal location... We believe the close proximity to the coastline will be a big plus for many home buyers," a Hao Yuan spokesman said.

Unit sizes range from 71 sq m to 160 sq m. The project is expected to be priced below $1,000 psf.


"We're very confident of the EC market... We know that EC buyers are getting more sophisticated."

- JBE Holdings director Patrick Lam. He says the EC segment is a "good diversification" away from the luxury market and adds that his company's next project is also likely to be an EC.

Plenty of amenities in north-east
Checking out the page views on the STProperty website gives an instant snapshot of what projects buyers are keen on. This week, we look at developments in districts 19 and 20 that have drawn the most attention.

Source: Straits Times | Money
By Rachel Scully

SINGAPORE'S north-east region comprises newer estates such as Punggol and Sengkang, and the mature estate of Hougang.

Together, the three areas make up District 19.

Residents in the area are served by popular shopping centres such as nex mall, Heartland Mall and Hougang Mall, and newer infrastructure such as the scenic Punggol Waterway.

The district is also connected by the North-East MRT line.

Based on the highest number of page views on website STProperty from July 8 to 14, the top five private homes which attracted the most attention were all 99-year leaseholds.

Topping the list was 702-unit Bartley Residences with an average asking price of $1,231 per sq ft (psf) for its one-, two- and three- or more bedder units. It also recorded the highest average transacted price among the projects at $1,191 psf between January and last month, according to data from the Urban Redevelopment Authority (URA).

The other four projects in the list were the 920-unit Riversails, the 380-unit Lush Acres, the 1,145-unit The Minton and the 700-unit The Topiary.

Farther to the west lies District 20 which covers Ang Mo Kio, Bishan and Thomson.

The Central Business District is easily accessible from these areas via the North-South MRT line, buses and expressways.

Many home buyers are drawn to this area because of the ample choices of food, leisure amenities and connectivity.

Heading the list of top five private homes by page views on STProperty in the past week was the 509-unit Sky Habitat in Bishan.

It offered one-, two- and three- or more bedders at an average asking price of $1,530 psf. URA data showed that the average transacted price for its units between January and last month was $1,546 psf.

The project with the highest average asking price between July 8 and 14 was the freehold Three 11 along Upper Thomson Road.

With only 65 units, its one-, two- and three- or more bedder units had an average asking price of $1,573 psf.

However, no caveats for the project had been lodged with the URA between January and June.

Its preview launch was held last month.

The other three projects that made it to the top five were The Gardens At Bishan, Belgravia Villas and Rafflesia condominium.